The git-daemon issue seems to have been resolved in v2.17.0 (verified with a non working v2.16.2.1). I.e. workaround of selecting text in console to "lock output buffer" should no longer be required.
From https://github.com/git/git/blob/v2.17.0/Documentation/RelNotes/2.17.0.txt:
- Assorted fixes to "git daemon". (merge ed15e58efe jk/daemon-fixes later to maint).